Discussions of survival tactics in a post-oil world can be categorized in many ways: pessimistic and optimistic, pacific and militaristic, technophobic and technophilic. But a curious dividing line can be seen between older and younger speakers. The old tend to think of little more than their bank accounts, often to the point of dismissing all else with the comment, "Well, anyway, I'll probably be dead before much happens." The young, on the other hand, expect to be entering a strange new world - if they think anything at all. The difference can be seen in terms of whether one expects to be living mainly before or after the end of the money economy.
image above: Photo illustrating "The Generation Gap".
From http://www.nydailynews.com/news/us_world/2009/06/29/2009-06-29_survey_shows_widening_generation_gap_among_americans.html
We stand on the peak between the rise and the fall of the Oil Age, and descriptions of the future may be either scientific analysis or science fiction, the latter serving a useful temporary role when the former is insufficient. The many studies of oil depletion seem to indicate that the peak itself was around 2008, and that by about 2030 oil production will be about half the peak rate. An older person of today might not have to worry about that 50-percent decline in production. A 20-year-old of today, on the other hand, will be 40 years old at that time, still planning to live for another few decades.
I used to participate in an Internet forum that discussed this future, and while I constantly preached my sermons on such matters as the virtues of Mandan Bride over other varieties of corn, my colleagues were utterly absorbed in the minutiae of pension plans, mortgages, and medicare, as well as the various forms of legalized extortion known as taxes and insurance. For them, everything had to be evaluated in terms of money. My counter-argument was that money can exist only as long as there are such things as governments, stock markets, and currency markets (as George Soros explains in The Crisis of Global Capitalism), and that such things are not likely to last much longer. At the time, I thought of myself as approaching middle age. Does that mean that my colleagues were even older? I suppose so.
This" peak-oil generation gap" seems to occur around age 50, although my choice of this number isn't based on any serious assembly of data, or on any proper statistical analysis. The old sit brooding in their counting houses. The young have a rather directionless anger.
The further we look into the future, the less clearly we can see, yet there is a general feeling that there are a few years left before the roller coaster really begins to terrify. Those who do not go looking for Mandan Bride to plant in their garden are those who have no intention of entering that recurring Stone Age of which Richard C. Duncan speaks in "The Peak of World Oil Production and the Road to the Olduvai Gorge." They may even be physically unfit for such activities, although a good deal of unfitness is self-imposed: I have never been an athlete, but at age 60 I can often outpace a much younger person. But for various good reasons, the elderly may have no intention of heading off into the Rockies with a black-powder gun and a collection of beaver traps. Such post-apocalyptic scenarios, it must be admitted, not only represent hard work, but the Rockies of the twenty-first century may be less welcoming than those same mountains of two hundred years ago. As we get older, our admiration for Nature may not diminish, but we might prefer to watch the sunset through a large window in a spacious cottage with all the mod cons.
All of this is fine, as long as we don't forget that money is only phlogiston, that mysterious stuff that was once thought to be responsible for combustion. The history of money is the history of its gradual transformation into the truly mystical. It is now so mystical that we can never be sure we actually have any. In the Middle Ages, yes, there was a chance that Vikings might show up on the weekend, but there was always the option of digging a hole in your backyard and burying your coins there until the danger had passed. If you survived that weekend, you could dig up your savings and carry on as usual. Today there are several good reasons why you might not be able to dig up what you buried.
There seem to be various words of financial wisdom from which to choose, but the proverbs contradict one another. All that is certain is that the next few years will be characterized by what was called "stagflation" during the temporary oil crises of the 1970s and 80s: prices go up but wages do not do the same. If that is again to be the case, and if there are other dangers to our finances, there are three options. The first is to do your best to hang onto money. The second is to get rid of it and exchange money for tangible goods. The third, the most radical, is to give up both money and tangible goods.
The first option is based on the hope that money as such will continue to exist in the near future. If money does continue to exist, then you should work hard, live frugally, and put all your savings into a bank account. A corollary, I suppose, is that you should get rid of debts, since it is often the high interest on debts that prevents people from making any genuine improvements in their lives.
The catch with this option is that there are four reasons why a savings account isn't what it used to be. The above-mentioned stagflation means, by definition, that your present savings will lose their purchasing power, while your ability to put money into the bank will simultaneously decrease. Secondly, in any country there is always the danger of a currency collapse, and even the American dollar itself is no longer sacred. There is no longer a gold standard, there are no longer fixed exchange rates, and therefore any form of money has only the spending power that the speculators allow. The third is that banks are not fortresses: banks can go bankrupt, as we have seen lately, and we should never be foolish enough to believe that a bank account is "guaranteed." (But, no, the credit collapse that began in 2007 has nothing to do with anything I'm discussing, contrary to rumor.) The fourth is that, as they say, money is just dots on a screen. What would you do if those dots disappeared? Without electricity and computers, there would be no money. The malicious wiping out of large amounts of electronic data is becoming child's play. In any case, as Duncan and others have said, the first significant sign of the End may be the collapse of electricity (which in North America is produced mainly with fossil fuels), not the "Sorry, No Gas" signs. No electricity, no dots.
The second option, getting rid of money and replacing it with tangible possessions, has the advantage that one is not plagued by the vagueness of finance. There is something quite charming about a large toolbox filled with screwdrivers, wrenches, pliers, and other tools, preferably non-electric. Durable clothing (polyester, I regret to say, lasts longer than cotton) and boots (leather, not synthetic) are always worth buying, and if they never get used they can be traded for something else. A small house without a mortgage is a great blessing. So is a large garden, if you have sense enough not to grow low-calorie vegetables (you'll need heavy food for heavy work). If you live in the country, learn to use a rifle and hunt for meat; one deer or moose is a lot of meals. I often suspect that we should forget about euros and gold, and that ammunition will be the only real currency.
And what about that more radical choice, to give up both money and tangible items? In the first place, Americans own vast quantities of junk, and hoarding is a national neurosis. Moving all that tonnage from one house to another can be enough to give its owner a heart attack. In the meantime, a house with one of everything is a prime target for burglars. A lakeside cottage filled with electronic gadgets might as well have a sign in front saying, "Take Me." Even now, the police cannot respond quickly to thefts in rural areas, and if situations become more anarchic the police will be even more overburdened.
Although many philosophers have advocated the simple life, that third choice is puzzling. (Besides, a successful financial analyst must prevaricate eternally.) After the collapse of the Soviet Union, universally during the Great Depression of the 1930s, and on other occasions, money simply ceased to be relevant to daily life. Until this event again comes to pass, however, there might be problems in living with neither money nor tangible goods. Both de jure and de facto, it is a crime to have no money, even if vagrancy laws are being repealed. Governments invented neither deer nor hunting, but they see fit to exact money retroactively for licenses to hunt deer. At the same time, taxes and insurance take a large part of whatever income you may have, generally at no advantage to yourself. Without either money or tangible possessions, also, how would you deal with a future emergency? Well, you could barter (although to some extent this is illegal), either with your present possessions or with your skills. You could learn to make the things you need instead of buying them. You could also learn to repair old items, at least if those possessions are not made of plastic, a nearly ubiquitous material that can only be discarded and repurchased. Perhaps above all, you could learn to stop the knee-jerk response that an item seen is an item that must be bought. But there are no simple answers: the money economy takes so much and gives so little, and we are all enchained by it. If I walk down the highway instead of driving a car, I tend to hang my head in embarrassment, afraid to be looked upon as an alcoholic or a drifter ― unless I am wearing colorful sports clothing and visibly flexing my limbs, making it seem that I am only doing it all for exercise.
The more we look at the fragility of money, then, it seems that the young survivalist with his army-manual reprints may not be living in a world so different from that of the wealthy pensioner who looks at oil depletion as a question of how many angels can dance on the head of a pin. Those who put their faith in the money economy were lucky enough to start saving cash in easier times. For young people today, however, working at a job that provides any savings can be a grim struggle. The two generations need to have more sympathy for each other. We are all heading into the same wilderness.
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